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Almost anybody who fulfills the basic car loan eligibility criteria can apply for a car loan in India. The basic requirements to take up any loan are driven by the age, employment status and other demographical factors of the car loan subscriber along with of course, their repayment capacity. The common requirements, irrespective of the financial institution or loan amount, for an individual to be eligible for a car loan approval include:

The borrower should be salaried, self-employed, business owner or a professional

They should be of Indian nationality residing in or outside India

They should be at least 21 years old and not more than 65 years old

Should meet the minimum repayment capacity or minimum salary requirements

They must be in the current job for one year (salaried) or two years in the same business (self-employed or professional)

Several documents that establish necessary information like your identity, proof of income and residence are required for a car loan application. But out of all, the documents relating to new or old car, are the most important. The complete set of relevant car loan documents makes one eligible for loan and one cannot do without submitting the right docs.Though, the documentation requirements vary from lender to lender, following is a list of commonly asked for documents required while applying for a car loan :

Income proof documents for Self-employed persons:

Duly signed and filled application form available either on the website or physically at the bank's outlets

Passport Size Photographs, generally 4-6 photos

An identity proof which can be one of these documents- Passport, Pan Card, Driving License, Voters ID card, Aadhaar card or employee identity card in case of government employees

Age Proof which may be a Voter ID card, Secondary school leaving certificate (class 10), Birth certificate, Passport, Aadhaar card, Pension payment order or Receipt of LIC policy.

Income proof documents in case of salaried individuals:

Latest 3 months' salary slips

Form 16 with proper computation of income

Salary account bank statement for six months

Latest acknowledged IT return

Business stability and ownership proof

Last two years' computation of income

Profit and Loss statement

Balance sheet certified by a C.A.

Latest six months' bank statement

Last two years' sales

Copies of acknowledged IT returns

PAN Card for the lender to check and verify if you are trustworthy enough to make regular repayments by your credit records history.

Documents providing Vehicle information which may include the sales receipts from the seller.

In order to establish that, all applicable laws and protocols are followed with regards to the purchased vehicle, the applicant must also submit copies of the Vehicle's Motor Insurance and your Driving License.

Though like most debt instruments, car loan interest rates are linked to the base rate dictated by RBI directives, the rate does differ slightly from bank to bank. Additional factors that may affect the interest rate on car loans include the loan amount, loan tenure, your credit history and your reputation with the bank. Currently car loans are available on interest rates ranging from 10% - 15% but there are a few banks that offer it for as low as 9.55%.

What is the maximum amount of loan that I am eligible for?

Nowadays, there are many financial entities that offer loan up to 90 percent of the car value, though the final loan amount may differ with each entity. The loan amount that you get depends upon a number of factors, like the price of vehicle, body type, brand and model, resale value, etc. Few agencies even offer a car loan on 100 percent of the car cost.

What documents do I need to provide and how long does the loan processing take?

At the time of applying for car loan, you are required to submit your identity, income and residential proofs. Once these documents are verified, it takes around 3-7 days in processing and sanctioning the loan.

What is the common tenure for car loan?

Generally, car loan tenures range from 1-5 years and some banks offer tenure of up to 7 years. Short tenure means you will have to pay higher EMI and long tenure means lesser EMI value.

What is CIBIL score and What CIBIL/credit score is considered to be safe for car loan?

CIBIL or the Credit Information Bureau (India) Limited is a Credit Information Company that collects information of an individual’s loan and credit card payment details, and provides a credit score based on the same. The financial and credit institutions use this score to evaluate loan applications. Credit or CIBIL scores lie in the range of 300 to 900, with 750 being an average score that is most commonly accepted by banks for accepting loan applications.
There is no such perfect score declared by banks or any such credit institution. However, an applicant with a score above 600 may not find too many hurdles while applying for car loan. A score of 750 is commonly readily accepted by the banks and they are quite willing to offer credit services to such applicants. This is because a score of 750 or above means that you have been a regular payer with your previous loans and will be able to repay your loan amount without being a defaulter.

In which cases does a loan application get rejected?

If you have a bad credit score in your bank account, then there is a high possibility of your loan application getting rejected. This can also happen if you have been a defaulter in any way in your past loans. If you are applying for loan for the first time, then the bank will consider your assets, income, company, etc.

What are the modes to pay EMIs? What to do in case of pre-payment?

You can either request the bank to auto-debit the monthly EMI amount from your bank account through ECS (Electronic Clearing System) or opt to pay the EMIs through post-dated cheques. In case of car loans, you can pre-pay the entire loan amount after 6 months to 1 year. You cannot make part payments in car loans. However, since these rules vary with the banks, it is important that check with your bank beforehand.

What happens if I get late in paying the EMI?

It is important that you pay all your EMIs on time. Some banks allow you to pay the EMI after due date, along with a late payment fee. However, this can happen only once or twice. Beyond that, you may be considered as a defaulter. In that case, the bank may even take over your vehicle. Also, this highly affects your credit score and reduces your chances of getting any kind of loan approved in future.

How can I foreclose my Car Loan Loan?

To facilitate prepayment of your Car Loan / Two wheeler Loan , you are required to visit an ICICI Bank Asset Servicing (Retail asset operation group ) branch along with the below mentioned documents to complete the prepayment process:

Pre-payment Statement

Request letter signed by the loan applicant

Bank statement reflecting the clearance of the last installment

PAN Card (If the closing cash payment is more than Rs.50,000)

Vehicle Registration Certificate (R C Book Copy)

Vehicle Insurance Copy

Mode of payment can be cash, cheque or demand draft

How do I update my mailing address, mobile number or e-mail ID registered under my loan account?

You may update your mailing address, mobile number or e-mail ID through any of the following modes:

Through Internet Banking:
STEPS

Login to www.icicibank.com with your user ID and password

Click on the "Loans" option

Click on the "Requests" option

Select the option "Request for Address Change" or "E-mail and contact number updation"

Through our Customer Care:

Call our 24-hour Customer Care and our executive will be glad to help you. To know the customer care number please click here.

What is a Monthly Reducing Balance in Car Loan?

In the case of monthly reducing balance method, the principal gets reduced at the end of every month and the interest is calculated on the outstanding principal at the end of the month.

What are the lending rates for Car Loan?

The lending rates vary on the basis of car models and tenure selected.

Can I avail of a loan on my existing car?

YES

Car Prices in India by Brands

CarzPrice, a website where users can check Ex-showroom and On-Road Price of all cars models across India. We assist our users by providing test drive, offers and deals from dealers near them and arrange best possible
finance for there desired car Models. carzprice.com is a product of Autozhop India Private Limited.